Vietnam's Startup Revolution

Why Vietnam is poised to become a startup unicorn incubator

It was a gray morning as my plane landed. Upon grabbing my bags and clearing customs, a man holding a card with my name waved and greeted me in broken English. He was my ride to my apartment and my quasi-tour guide for the day, sharing facts and stories on the way to the city.

I was about to embark on a yearlong journey in my newly adopted country. I lived in a city with food vendors lining the roads, streets clogged with bicycles, and construction cranes in every direction. You still needed cash to buy anything, the subway had two lines, and locals told you the safest thing to drink was beer. The city was Beijing and the year was 2004.

When I first arrived in Vietnam, I was not exactly sure what to expect. Some things were similar like the need for cash at most places, rows of street food, and construction everywhere. Instead of bicycles, it was dodging motorbikes as I crossed the roads. And I definitely consumed my fair share of beer.

Vietnam has become one of the hottest economies the past decade.

I had come to Saigon because I was asked to be a mentor for a Rails Girls workshop at the TinyPulse offices. I was with Stack Overflow at the time and seeing my travels through Asia, some folks from the organization had reached out on a limb. Would I come to Vietnam? Absolutely!

What brought me to Asia was data I had analyzed from Stack Overflow on developer ecosystems. When I ran the numbers, the two fastest growing developer ecosystems were Indonesia and Vietnam. So, to be in Vietnam to meet developers and learn about the scene was an opportunity I couldn’t refuse.

Since my first visit to Vietnam in summer of 2019, I have returned regularly to dive deeper into the tech landscape (and to get a decent bánh xèo). Lingering in my mind though has been a deeper question, does Vietnam have the potential to have a similar growth story as China?

Excellent bánh xèo place in Da Nang!

In Vietnam’s favor, the demographics are encouraging. While the population is significantly smaller, Vietnam has a population of 100 million of which 60% is under the age of 35. Even better, Vietnam is experiencing their golden population era where there is only one dependent person for every two or more working-age people.

Vietnam has also been enjoying consistently high growth over the past decade. Since 2010, Vietnam has maintained a 6% annual GDP growth rate. As the economy has grown, so has household prosperity with the per capita GDP rising 2.5 times in the same period to $4,324. Both indicators put Vietnam in the top 15 fastest growing countries in the world over the past decade.

Much of this growth was only possible after the government implemented economic reforms called Doi Moi in 1986. This opened the country to market-based activities, including the birth of a nascent IT outsourcing industry led by now familiar names like FPT, TMA, and CMC. Further opening occurred in 1995 with the US normalizing relations with Vietnam, and in 2007 when the nation entered the WTO.

Today, Vietnam is a much more advanced and more digitally connected nation. There are 168 million cell phone connections (169% of the population) and 78 million are on the Internet (79% of the nation). This has enabled Vietnam to lead Southeast Asia (SEA) in growth of their digital economy as consumers rely more on the Internet to buy goods, leading to the highest growth rate of digital payments in SEA last year.

The combination of positive demographics, a booming economy, and rising digitization have opened up the floodgates for tech startups in Vietnam. Over the past five years, venture capital firms (VCs) have deployed $3.9 billion into Vietnamese startups across 652 deals, with a high of $1.4 billion in 2021. In recent years, Vietnam has ushered in four unicorns, starting with VNG in 2014, then Momo, VNPay, and Sky Mavis, and many other soonicorns such as Buymed (Thuocsi), KiotViet, Sendo, Tiki, and Topica.

It could be argued that many other nations have had equally favorable conditions and generated more successful startup outcomes. Indonesia, for example, with nearly three times the population, large exits in Blibli, Bukalapak, and GoTo, and over $11 billion invested into startups over the past five years, has been a much more active startup scene. Is there something that makes Vietnam special as an emerging startup ecosystem?

To help answer this question, we reached out to startup founders, VCs, and influencers in Vietnam, both Vietnamese and foreigners. We asked them a series of questions to get their perspectives into launching and scaling a startup in Vietnam. Based on the sixty results we received from our survey, we found six key themes. As we  already covered the first three, we will dive deeper into the others:

  1. Large and Young Population

  2. Favorable Economic Conditions

  3. Long-Term Market Potential

  4. Skilled and Affordable Tech Talent

  5. Government Support and Policies

  6. Readily Available Startup Resources

Vietnamese culture has always highly valued education, especially STEM. In fact, EdTech is the third most active sector in Vietnam’s startup ecosystem with $103 million invested and over 100 EdTech startups launching in 2022 alone. This could also explain why 140,000 Vietnamese students study abroad every year, the highest percentage across SEA at 37%.

This has allowed Vietnam to build a strong tech talent base. As Binh Tran, General Partner at AVV, says, “It's not uncommon to see VC-backed US startups setting up engineering teams here, which says a lot about the caliber of our engineers.” Vietnam now has 530,000 developers and over 50,000 graduates entering the workforce annually. This highly skilled talent is also more affordable compared to other counties, with the average salary for a Vietnamese software engineer just over $10,000 per year.

Many of our respondents also cited actions from the Vietnamese government to directly support startup activation. Decision No. 844 in 2016 was formative in helping to recognize the national importance of startups. Then in 2019, the government formed NIC, or the National Innovation Center, to provide training, mentoring, tax incentives, and support for startups. They also co-authored the annual Vietnam Innovation & Tech Investment Report, an invaluable guide for understanding the startup ecosystem.

Vietnam has also become a favorable location for foreign entrepreneurs. The Law on Foreign Investment in 1987 initially allowed for direct foreign investment into Vietnam. Over the years, Vietnam has further opened the economy and is one of the few countries in SEA that allows 100% foreign ownership of businesses (in most cases). This has created more gravity pulling in entrepreneurs from other countries to establish their businesses in Vietnam.

Any growing startup ecosystem not only needs talented entrepreneurs, it also requires capital, resources, and a community. Our survey cited a much healthier investment scene to provide the needed capital for early-stage startups. This includes local firms such as Ansible Ventures, AVV, DO Ventures, Mekong Capital, Son Tech Investment, ThinkZone & Touchstone Partners, and international firms like Cocoon Capital, Golden Gate Ventures, Monk’s Hill Ventures & TNBAura. For earlier stage startups, there has also developed a health incubator and accelerator scene with well-known brands like Antler, Iterative, and Founders Institute among the nearly one hundred programs that have launched, including programs from the NIC.

Startups need a space to work and community for support. Vietnam has been rapidly increasing its supply of co-working locations and is now 20th globally in terms of the number of coworking facilities managed by operators such as Dreamplex, cirCO, Toong, and TheSentry. As the startup ecosystem has grown, there has been an explosion of startup events and communities, from large scale conferences such as AI Day, Tech in Asia, and Techfest, to communities such as Tech After Dark supported by Ivy+Partners.

As with any emerging ecosystem however, there come risks. Our survey highlighted four major hurdles that could slow down Vietnam’s ambitious plans to accelerate its startup ecosystem:

  1. Regulatory and Bureaucratic Obstacles

  2. Language Barriers and Limited English

  3. Lack Talent Needed for Global Scale

  4. No Significant Exits or Liquidity

The World Bank in 2020 ranked Vietnam 70 among 190 economies in terms of ease of doing business. However, TMF Group noted in their Global Business Complexity Index that Vietnam’s ranking has improved due to reducing the effort to start a business and do business filings. The bureaucracy that startups still have to navigate can be daunting, and the recent corruption scandals in the real estate and financial markets have made investors uneasy in committing long-term to the market. This has led many Vietnamese startups to domicile in neighboring Singapore not only for better legal transparency but also to get funding from VCs.

On the global scale, English is the lingua franca of the business world. While Vietnam has improved its ranking in English proficiency, the nation still ranks 58th out of 113 non-native English-speaking countries. This poses difficulties for Vietnamese startups looking to expand regionally or globally. The lack of English skills also limits non-Vietnamese from launching a startup in Vietnam when compared to fellow SEA nations Malaysia and the Philippines, where English is readily understood.

Even with a large Vietnamese diaspora and contingent of overseas students, very little of that global experience has filtered into the startup community. Many of our survey respondents noted that while Vietnam has plenty of tech talent, there is still a dearth of more advanced skills in AI, Cloud Computing, and DevOps. Equally important though are the lack of experienced operators that have scaled a startup through sales, marketing, product development, and operations.

This leads to what we believe to be the biggest thing holding back Vietnam from becoming a leading startup hub; lack of exits. Successful startups breed more successful startups, more talented founders, and more money recycling into the ecosystem to fund more startups. This has been the case in Silicon Valley, New York City, and Singapore, which has had notable exits with Grab, PropertyGuru, and SEA. There was some hope with VNG listing in the US until they pulled their IPO filing in January. While there are some Vietnamese startups on the cusp of a large sale or IPO, the listing requirements for the local market is prohibitive and the bar for an international listing has gotten higher.

The lack of exits has created a glut of startups unable to scale. Several survey responses noted that while early-stage capital is abundant, growth stage capital is scarce. Why? Because of the lack of liquidity in the Vietnam market and uncertainty of large exits, holding back investors from committing to Vietnam.

Despite the roadblocks, Vietnam is poised for massive growth into the next decade. Just looking at Foreign Direct Investment (FDI), Vietnam received $36.61 billion, or a 32.1% increase from last year, meaning investors do see significant opportunities for returns. It is still early days for Vietnam, and only a matter of time when growth stage VCs come to fund scaling startups.

This is why we believe that Vietnam is an emerging Unicorn Country. Much like China of two decades ago, the country is undergoing a massive transformation. Trends from broadening digitization to a healthy talent supply to a rising middle class ensure that Vietnam will have a robust startup ecosystem for years to come.

Does this mean Vietnam will have 287 unicorns like China? No, China has 10x the population and a few decades head start. However, Vietnam's Ministry of Planning and Investment (MPI) put out a plan back in 2019 for the nation to create 5 unicorns by 2025 and 10 by 2023. From the entrepreneurial energy we saw on the ground at the recent Tech in Asia Saigon Summit, we would say Vietnam is well on its way to achieving its ambitious goals.

In our survey, we also asked respondents which other startups they admired (outside their own). We got 42 startups mentioned! Of course, this is a very small fraction of the over 4,000 startups in Vietname, but this tiny list manages to cover nearly every sector from Agritech to Fintech to Gaming to HealthTech, and Transportation & Logistics. Some also got multiple mentions such as unicorns MoMo, VNpay & VNG, but also Amanotes, Dat Bike, Techcoop, and a startup we saw at a recent Antler showcase, SoBanHang.

To give you a flavor of the types of startups you will find in Vietnam, we provided the entire list of admired startups with websites and descriptions below for you to explore (if you are the founder of one of these startups and prefer another description, let us know). Right below that list, we also named the startups of founders that responded to our survey so you can learn more about them:

  • Amanotes - music games publisher

  • Aniday - recruitment platform

  • Buymed - B2B platform for healthcare distribution

  • BUYO Bioplastics - biodegradable bioplastic solution

  • Cho Deli - logistics supply chain for F&B industry

  • Cocoon Cosmetics - vegan beauty and cosmetics brand

  • Coolmate - D2C e-commerce men's fashion retailer

  • Dat Bike - electric motorbike manufacturer

  • DiaB Healthcare - diabetes lifestyle management

  • Diaflow - enterprises AI apps builder

  • Docosan - app to find and schedule doctor appointments

  • Elsa - English language learning app

  • Enfarm - smart fertilizer technology for farmers

  • entobel - insect-derived ingredient supplier for animal feed

  • FlexOS - digital tools for hybrid work

  • FoodMap - connecting customers with ethical farmers

  • GeneStory - genetic testing services provider

  • GreenSys - SaaS platform for road transportation

  • Logivan - easily find and manage trucks digitally

  • Lozi / Loship - on-demand hyperlocal delivery service

  • M Village - co-living space provider

  • med247 - telehealth and 24/7 medical assistant app

  • MindPal Labs - AI automation and agent building platform

  • MindX - online/offline coding education platform

  • MoMo - e-wallet and payments app

  • Persona Studios - conversational AI Personas platform

  • Saladin - insurance comparison and application site

  • Selex Motors - EV battery swapping ecosystem for last mile transport

  • Sky Mavis - blockchain game developer

  • SoBanHang - digital storefront solutions for small businesses

  • Techcoop - integrated digital services for agriculture industry

  • Tepbac - digital platform for aquaculture industry

  • - eCommerce retail marketplace

  • TopCV - online recruitment platform

  • True Platform - B2B SaaS customer-centric platform for SME's

  • UpYouth - technopreneurial community for young Vietnamese

  • VNG - online gaming, media & fintech provider

  • VNpay - Vietnamese payment service provider

  • Vucar - used car buying digital platform

  • vuihoc - K-12 online education platform

  • Wareflex - one-stop digital platform for logistics services

  • Wolffun Game - PvP games for mobile platforms

List of startups from founders that responded to the survey (with the expection of a handful were too early to include in the list):

  • anycover - modern product protection for e-commerce

  • Appota - leader of Vietnam's online entertainment industry

  • beehexa - integrate & automate business processes for businesses

  • BeeKrowd - AI financial planning & analysis under 5 minutes

  • CoderSchool - tech education and job placement for the AI era

  • EasyGop - AI patient credit scoring increase access to healthcare

  • Eatsy Health - personalized weight loss app to live healthier lives

  • Husa Tech - people analytics for data-driven decisions of workforce

  • - online e-invoice system for Vietnamese SMEs

  • iVatar - make your own digital twin to engage your audience

  • KidsOnline - one-stop cloud-based kindergarten management system

  • Lingopure - learn professional English for career success

  • Medigo Software - order medicine immediately from an app

  • OLLI Technology - smart speaker for the home in Vietnamese

  • Nuclent - no-code platform to create internal apps and workflows

  • Persona Studios - conversational AI-powered personas for business

  • PREP - smart language learning and test preparation platform

  • - career engagement platform for global tech talent

  • Quickom - decentralized teleconference platform for events

  • Raise - virtual assistant app for parents

  • ReVacancy - job alerts with HR contacts in your messaging apps

  • Saner.AI - AI note taking app for those with ADHD

  • Staffroom - hire ID verified and criminal checked educators

  • SwiftHub - e-Fulfillment for eCommerce and DTC brands

  • Tubudd - find a suitable local buddy for your trip

This was a big edition of Founders in the Cloud, taking an extra long time to pull together the data and research to create a startup ecosystem report of Vietnam.

The most important input into this report though was from our awesome friends in Vietnam that took time out of their day to respond to our survey. We wish to acknowledge and thank the following people:

Ivy Nhi Chau, Ha (Hannah) Dau, Kevin Davis, Minh Do, Nam Doan, Mark Le Duc Phuong, Cheraine Escott, Alexandra Filatova, Hippolyte Genet, Andy Hoang, Anh Hoang, Ngoc Anh Hoang, Phan Hung, Tai Huynh, Hannah Huynh, Suresh Kumar, Nam Le, Charles Lee, Daniel Maneveld, Giang Trinh Minh, Ky Nam, Kartick Narayan, Minh Hoang Ngo, Duong (Michael) Ngo, Hung Ngo, Yen Nguyen, Hung (Hubert) Nguyen, Olivia Nguyen, Thanh C. Nguyen, Lan Anh Nguyen, Thục-Anh (Leah) Nguyễn, Quang Nguyễn, Tuan (Erik) Nguyen Hoang, Greg Ohan, Liem Pham, Linh Pham, Manh Ha Pham, Tu Pham, Hai (Haley) Phan, Aleksandr Ptitsyn, Thu (Taylor) Quach, Jan Rothkegel, James Shimell, Thomas To, Binh Tran, Nha Tran, Quang Tran, Tu Tran, Long (Jay) Tran, Hao Tran, Tung Tran, Hoan Tran, Giap (Galvin) Vo, Khang Vo, Annie Vu, Giap Phan Vu, Valerie Van Vu, David Yi & many others that wish to be unnamed or forgot to add their name in their response 😅

If you did reply and did not see your name above, sincere apologies and we will add you to the web and LinkedIn version of this post.

Besides many awesome people replying, we also wanted to acknowledge the awesome organizations that supported this survey and post:

And yes, we are getting this out later than usual, but we will be back on our Friday schedule later this week exploring what is going on in AI!